6.27.2007

Nissan: Trying to Be Lean

Toyota gets most of the publicity, but it’s not the only Asian automaker pursuing a lean strategy.


            Nissan is another, or at least it tries to be. At the recent Automotive News Manufacturing Conference, I heard John Miller, vice president of purchasing for Nissan North America, talk about some of the techniques the company employs. He made reference to cross-functional teams, “kaizen-type activity” and other lean methods. He also said, a bit defensively, “we have our own Nissan Production Way.”


            However, for me, the most telling remark came when Miller was asked to characterize the Nissan culture. His comment: “we’re a very self-challenging company; we are never happy.” That, of course, is the right kind of attitude, one that goes to the very heart of continuous improvement.


            The conference also included a tour of Nissan’s 5.4-million-square-foot plant in Smyrna, Tennessee, which the company claims is the largest North American manufacturing plant under one roof. (I thought Toyota’s plant in Georgetown, Kentucky, is larger, but maybe that’s not under one roof.)


            The plant, opened in 1983, is a busy operation with a high degree of automation (approximately 1,000 robots). Nissan employs 8,300 people in mid-Tennessee, and the plant – which makes two cars, two SUVs and a pickup truck – has a capacity of 550,000 vehicles annually.


            Frankly, for a company that professes to be lean, I didn’t see as much in the way of visual controls as I expected at the plant. Perhaps that’s an area in need of some kaizen events.


            By the way, Miller admitted that 2006 was a “challenging” year; for the quarter ending March 31, Nissan reported global operating profit of about $1.9 billion (US), down 7 percent from a year earlier. Net income was about $600 million, down 53.7 percent due to (in order of decreasing magnitude) “provisions taken for the one-time charge for headcount reductions in the U.S. and Japan, lower profit contribution from equity method companies, and higher taxes.” Global sales (number of units sold) were down 2.4 percent, and sales in the U.S. were down 4 percent.


            The figures suggest that Nissan has some distance to go to achieve the kind of lean success enjoyed by Toyota. But its heart seems to be in the right place.

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